Smart contracts are programs coded on a blockchain that automatically execute when predetermined conditions are met. These contracts follow a simple logic: “if X occurs, then Y happens.”
In the case of Dtravel, smart contracts are used to facilitate payments between hosts and guests. Instead of Dtravel custodying payments, the entire process is conducted in a peer-to-peer manner.
If the cancellation period ends and the guest has not canceled, then the smart contract will automatically release the funds to the host. By employing smart contracts, the parties to the contract (i.e. the host and guest) know the potential outcomes prior to entering into the transaction - transparent, efficient and fair.